Economy

Markets see volatility in crypto and commodities as Trump picks Warsh for Federal Reserve Chair

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Jan 31, 2026

THE BARE STORY

President Donald Trump has announced the selection of Kevin Warsh to serve as the next chairman of the Federal Reserve. Warsh, who previously served as a Fed governor from 2006 to 2011, would replace current Chairman Jerome Powell when his term expires in May, pending Senate confirmation. The announcement followed a Federal Reserve meeting on Wednesday where policymakers decided to keep interest rates steady after a series of prior cuts.

Following the nomination, financial markets experienced significant shifts. Observers noted that the announcement appeared to bolster the U.S. dollar, reportedly easing investor concerns regarding the central bank's future independence. This strengthening of the dollar coincided with sharp declines in alternative assets. On Friday, the silver market recorded its worst single-day performance since 1980, with spot silver falling 28% to $83.45 an ounce and futures dropping over 31%.

The selloff extended into the weekend for the cryptocurrency market. On Saturday, Bitcoin fell 7.6% to trade below $78,000, while Ethereum slid approximately 11% and Solana lost 13%. Retail investors were reportedly digesting both the commodity swings and the leadership changes at the Federal Reserve.

In the equity markets, stocks showed mixed results for the week ending January 31. The S&P 500 briefly surpassed the 7,000 mark for the first time on Wednesday before closing the week with a slight 0.34% gain. The Nasdaq remained nearly flat. Market movements were also driven by corporate earnings; Meta Platforms shares rose nearly 9% following a strong report, while Microsoft stock dropped over 8% after providing a disappointing update on its cloud business.

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• Historic collapse in silver prices The strengthening of the dollar following the nomination coincided with a severe downturn in commodities, specifically silver, which recorded its worst single-day performance since 1980. Spot silver plummeted 28% to $83.45 an ounce, while futures dropped over 31%, highlighting immense volatility and selling pressure in alternative assets.

• Significant selloff in the cryptocurrency sector The market shift extended into the weekend, impacting digital assets as retail investors digested the leadership changes and commodity swings. Bitcoin fell 7.6%, dropping below $78,000, while Ethereum and Solana experienced steeper declines of approximately 11% and 13% respectively, marking a broad retreat for the crypto market.

• Drag from disappointing tech earnings Despite the broader market holding steady, the technology sector faced challenges that contributed to a flat Nasdaq performance. Microsoft shares dropped over 8% after the company provided a disappointing update on its cloud business, serving as a counterweight to gains seen in other parts of the market.

How it may affect me

As a U.S. reader:

• Investors holding alternative assets such as silver or cryptocurrencies may see significant short-term drops in portfolio value, with silver experiencing historic declines and major digital currencies like Bitcoin and Ethereum falling sharply.

• Individuals with retirement accounts or investments tracking the S&P 500 likely retained value as the broader market remained resilient, though those holding individual tech stocks faced mixed results depending on specific company earnings.

• The strengthening of the U.S. dollar following the nomination indicates a shift in market sentiment that lowers the comparative value of commodities while signaling renewed investor confidence in the central bank's future independence.

• Borrowers and savers will see interest rates remain at current levels for the immediate future following the Federal Reserve's decision to hold rates steady, with a leadership transition scheduled for May pending Senate confirmation.

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